For businesses selling internationally, understanding VAT rules can be a huge barrier to trade. Avalara VAT expert can help. Enter details about VAT transactions into VAT Expert and it will show how they should be taxed.

For businesses selling internationally, understanding VAT rules can be a huge barrier to trade. Avalara VAT expert can help. Enter details about VAT transactions into VAT Expert and it will show how they should be taxed.

Avalara AvaTax Excise automates the process of identifying and calculating excise taxes for financial transactions involving motor fuels, petroleum products, and natural gas in thousands of jurisdictions in the U.S. and Canada

Avalara MyLodgeTax makes lodging tax compliance fast and easy so that you can focus on what’s important – making your guests happy. We can handle all of your short-term rental or vacation property occupancy taxes for you.

Sales Tax Compliance in the Oil and Gas Industry

"Blood may be thicker than water, but oil is thicker than both." -J.R. Ewing, Dallas

In the highly regulated oil and gas industry, most executives are no stranger to the costs of compliance. Whether in response to emergencies (Deepwater Horizon, Pemex Pipeline explosion), or the resulting political pressure, national and international regulators keep close watch over the health, safety, and economic implications of the industry.

In the US, state and local taxes can be a significant cost of doing business onshore or in state waters. Each state has its own tax statute. The details of the various state requirements are numerous, and require expertise beyond the scope of most oil and gas companies. (Ernst and Young)

Managing compliance within an ERP

Companies of all sizes turn to Enterprise Resource Planning (ERP) systems to manage various aspects of compliance, centralize and streamline processes, and increase efficiencies. ERPs allow oil and gas companies to access and oversee important documentation--such as drilling rights--in order to minimize risk and ensure regulatory compliance. Correctly handling sales tax within the ERP is trickier than it seems. And sales tax errors, one of the lesser-known drains on a company’s resources, are a source of audit risk.

An ERP system allows companies to create a centralized source of data on everything from customer contacts to inventory to invoicing. Sales tax is often an afterthought. It doesn’t have to be.

> Tracking multi-jurisdictional sales tax rates and rules can be a huge resource drain for companies.
> For those doing business overseas, matters are more complex.
> Assigning the wrong jurisdiction to a transaction.
> Charging the wrong rate.
> VAT: Not knowing the relevant country’s rules about oil and gas industry related taxation.

> Charging the wrong rate.
> Remitting and reporting to the wrong jurisdiction.
> Not understanding which services are subject to sales tax.
> Miscalculating VAT charges on exploration and production, as well as VAT.

As companies grow, compliance efforts must be scalable to accommodate that growth or any other change. Making compliance a scalable process requires imbedding controls and accountability for compliance throughout the organization. (Ernst and Young)

Managing sales tax complexities inherent in the oil and gas industry can be streamlined and automated within your existing ERP. Mitigating sales tax risks at various stages of exploration, drilling, production, and delivery requires an automated, updated, integrated sales tax management system. After all, even though regulations within the oil and gas industry are complex, sales tax doesn’t have to be.